Governor signs beer tax measure

NASHVILLE, Tenn. (AP) -- A proposal to freeze the state's beer tax has been signed by the governor.

Tennessee's beer taxes outstrip any other state's because the bulk of the levy is based on price rather than volume. The more a beer costs, the higher the taxes that must be paid to buy it.

In Tennessee, brewers pay federal and state taxes per 31-gallon barrel, and then a 17 percent tax is charged to wholesalers based on price. Consumers then pay as much as 9.75 percent in sales taxes on top of the previous charges.

The proposal converts the 17 percent tax to a flat tax in line with the current rate.